Agreement and Plan of Merger (2004)Full Document 

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AGREEMENT AND PLAN OF MERGER

 

 

dated as of

 

 

February 10, 2004

 

 

among

 

 

LIBERTY IDTC HOLDINGS, INC.,

 

LIBERTY IDTC HOLDINGS 2, INC.,

and

LIBERTY IDTC HOLDINGS 3, INC.,

 

 

as “Seller Subsidiaries”;

 

 

LIBERTY MEDIA CORPORATION;

 

IDT CORPORATION;

 

 

and

 

IDTI HOLDINGS, LLC,

 

 

as “IDT Subsidiary”

 



 

AGREEMENT AND PLAN OF MERGER

 

AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated February 10, 2004, by and among Liberty Media Corporation, a Delaware corporation (“Liberty Parent”), Liberty IDTC Holdings, Inc., a Delaware corporation (“Liberty IDTC”), Liberty IDTC Holdings 2, Inc., a Delaware corporation (“Liberty IDTC 2”), Liberty IDTC Holdings 3, Inc., a Delaware corporation (“Liberty IDTC 3,” and together with Liberty IDTC and Liberty IDTC 2, the “Seller Subsidiaries”), IDT Corporation, a Delaware corporation (“IDT Parent”), and IDTI Holdings, LLC, a Delaware limited liability company (“IDT Subsidiary”).

 

R E C I T A L S:

 

WHEREAS, the Seller Subsidiaries are direct or indirect wholly owned subsidiaries of Liberty Parent, and IDT Subsidiary is a wholly owned subsidiary of IDT Parent;

 

WHEREAS, the sole assets of each Seller Subsidiary are shares of capital stock of IDT Investments Inc., a Nevada corporation (“IDTI”);

 

WHEREAS, IDT Parent desires to acquire each Seller Subsidiary by means of a merger, and Liberty Parent desires to effect such mergers; and

 

WHEREAS, it is intended that, for federal income tax purposes, each such merger shall qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

NOW THEREFORE, the parties hereto agree as follows:

 

ARTICLE 1

 

THE MERGERS

 

Section 1.01.  The Mergers.

 

(a)           At the Effective Time (as hereinafter defined), each Seller Subsidiary shall be merged with and into IDT Subsidiary (each, a “Merger” and collectively, the “Mergers”) in accordance with Section 264 of the General Corporation Law of the State of Delaware (the “DGCL”) and Section 18-209 of the Delaware Limited Liability Company Act (the “DLLCA”) and in accordance with the terms and conditions hereof, whereupon the separate existence of each Seller Subsidiary shall cease in accordance with the DGCL and the DLLCA, and IDT Subsidiary shall be the surviving entity (the “Surviving Entity”) of each Merger in accordance with the DGCL and the DLLCA.

 

(b)           On the Closing Date (as defined in Section 2.04(a) below), IDT Subsidiary shall file a certificate of merger with the Secretary of State of Delaware and make all other filings or recordings required by the DGCL and the DLLCA in connection with each Merger.  Each Merger shall become effective at such time (the “Effective Time”) as the corresponding

 



 

certificate of merger is duly filed with the Secretary of State of Delaware or at such later time as is specified in such certificate of merger.

 

(c)           From and after the Effective Time of each Merger, the Surviving Entity shall possess all the rights, powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the Seller Subsidiary party to such Merger and IDT Subsidiary, all as provided under the DGCL and the DLLCA, and thereafter neither Liberty Parent nor any of its affiliates shall have any right, obligation or liability with respect to any Seller Subsidiary other than as expressly set forth in this Agreement.

 

Section 1.02.  Conversion of Shares.

 

(a)           At the Effective Time of the Merger of Liberty IDTC and IDT Subsidiary, by virtue of such Merger and without any action on the part of any of the parties hereto or any holder of any securities or interests of or in Liberty IDTC or IDT Subsidiary, each share of capital stock of Liberty IDTC outstanding immediately prior to such Effective Time shall automatically be converted into the right to receive 46.117 shares of Class B Common Stock, par value $.01 per share, of IDT Parent (“IDT Parent Class B Common Stock”).

 

(b)           At the Effective Time of the Merger of Liberty IDTC 2 and IDT Subsidiary, by virtue of such Merger and without any action on the part of any of the parties hereto or any holder of any securities or interests of or in Liberty IDTC 2 or IDT Subsidiary, each share of capital stock of Liberty IDTC 2 outstanding immediately prior to such Effective Time shall automatically be converted into the right to receive 2030.669 shares of IDT Parent Class B Common Stock.

 

(c)           At the Effective Time of the Merger of Liberty IDTC 3 and IDT Subsidiary, by virtue of such Merger and without any action on the part of any of the parties hereto or any holder of any securities or interests of or in Liberty IDTC 3 or IDT Subsidiary, each share of capital stock of Liberty IDTC 3 outstanding immediately prior to such Effective Time shall automatically be converted into the right to receive 676.89 shares of IDT Parent Class B Common Stock.  The shares of IDT Parent Class B Common Stock issuable in the Mergers, as may be adjusted pursuant to Section 1.02(d) hereof, are referred to herein as the “Consideration Shares”.

 

(d)           In the event of any dividend, distribution, recapitalization, stock split or combination, or similar event with respect to or affecting the IDT Parent Class B Stock after the date hereof and prior to the Effective Time, the foregoing exchange ratios shall be appropriately adjusted.

 

(e)           At the Effective Time of each Merger, all shares of capital stock of Liberty IDTC, Liberty IDTC 2 and Liberty IDTC 3, as applicable, that have been converted into the right to receive shares of IDT Parent Class B Common Stock shall be automatically canceled and shall cease to exist, and the holders of the capital stock of Liberty IDTC, Liberty IDTC 2 and Liberty IDTC 3 shall cease to have any rights with respect to such shares, other than the right to receive certificates representing the applicable Consideration Shares upon surrender to the Surviving

 

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Entity of the relevant instrument representing the shares of capital stock of Liberty IDTC, Liberty IDTC 2 and Liberty IDTC 3, as applicable.

 

(f)            If any certificate representing Consideration Shares is to be issued in a name other than that in which the surrendered certificate theretofore representing capital stock of a Seller Subsidiary is registered, it shall be a condition to such issuance that the certificate so surrendered be properly endorsed or otherwise in proper form for transfer.

 

(g)           Upon consummation of the Mergers, each warrant, option or other right to acquire any securities of any Seller Subsidiary, if any, outstanding immediately prior to the Effective Time of the applicable Merger shall be automatically canceled and shall cease to exist, and no Consideration Shares or other consideration shall be paid in exchange for the cancellation of such warrant, option or other right.

 

Section 1.03.  No Fractional Shares.  No certificates or scrip representing fractional shares of IDT Parent Class B Common Stock shall be issued as a result of any conversion provided for in Section 1.02.  In lieu of the issuance of fractional shares, in the event a holder of Seller Subsidiary capital stock would be entitled to receive any fraction of a share of IDT Parent Class B Common Stock pursuant to Section 1.02, such fraction shall be rounded up to the nearest whole number, so that such holder will receive a whole number of shares of IDT Parent Class B Common Stock; provided, however, that if more than one certificate representing shares of any Seller Subsidiary capital stock shall be surrendered for the account of the same holder, the number of shares of IDT Parent Class B Common Stock for which certificates have been surrendered shall be computed on the basis of the aggregate number of shares represented by the certificates so surrendered.

 

Section 1.04.  Stock Transfer Books; Extinction of Stockholder Rights.  At the Effective Time, the stock transfer books of the Seller Subsidiaries shall be closed with respect to the shares of capital stock of the Seller Subsidiaries outstanding immediately prior to the Effective Time.  All Consideration Shares issued upon surrender of a certificate representing shares of capital stock of any Seller Subsidiary in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to that certificate and the shares of Seller Subsidiary capital stock represented thereby, and there shall be no further registration of transfers on the stock transfer books of any Seller Subsidiary of shares of capital stock of such Seller Subsidiary outstanding immediately prior to the Effective Time.

 

Section 1.05.  Tax Effect.  The parties intend that each of the Mergers shall qualify as a tax-free reorganization within the meaning of Section 368(a) of the Code and that this Agreement shall be and hereby is adopted as a plan of reorganization for purposes of Section 368 of the Code and the Treasury Regulations (as defined in Section 7.01) thereunder.

 

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ARTICLE 2

 

THE SURVIVING ENTITY; CLOSING

 

Section 2.01.  Certificate of Formation.  The certificate of formation of IDT Subsidiary in effect at the Effective Time of each Merger shall be the certificate of formation of the Surviving Entity, until amended in accordance with the DLLCA.

 

Section 2.02.  Limited Liability Company Agreement.  The limited liability company agreement of IDT Subsidiary in effect immediately prior to the Effective Time of each Merger shall be the limited liability company agreement of the Surviving Entity, until amended in accordance with DLLCA.

 

Section 2.03.  Officers.  From and after the Effective Time of each Merger, the officers of IDT Subsidiary, if any, immediately prior to such Effective Time shall be the officers of the Surviving Entity, each to hold office in accordance with the limited liability company agreement of the Surviving Entity until his or her successor is designated in accordance with the limited liability company agreement.

 

Section 2.04.  Closing.

 

(a)           Time and Place.  The consummation of the Mergers and the issuance and delivery of the Consideration Shares by IDT Parent to the stockholders of the Seller Subsidiaries (the “Closing”) will take place at the offices of Baker Botts L.L.P., 30 Rockefeller Plaza, New York, New York, at 10:00 a.m. on the Business Day that is three (3) Business Days after the date on which the conditions set forth in Article 3 have been fulfilled or, where permissible, waived, or at such other time and place as IDT Parent and Liberty Parent may agree orally or in writing (the “Closing Date”).  For purposes of this Agreement, “Business Day” means a day other than a Saturday, Sunday or day on which banks in the City of New York are authorized to close.

 

(b)           Deliveries.  At the Closing:

 

(i)            Liberty Parent shall deliver to IDT Parent (i) a certificate from Liberty Parent, dated the Closing Date, executed by an executive officer of Liberty Parent stating that, to the best knowledge of such executive officer, the representations and warranties of Liberty Parent set forth in Article 4 and Article 7 of this Agreement are, if specifically qualified by materiality, true and correct and, if not so qualified, true and correct in all material respects, in each case as of the Closing Date, except to the extent such representations and warranties are expressly made as of only an earlier date, (ii) a certificate of the secretary of Liberty Parent, dated the Closing Date, certifying that all necessary corporate action required to be taken by Liberty Parent, each Seller Subsidiary and the stockholders of each Seller Subsidiary in connection with the execution, delivery and performance of this Agreement and the consummation of the Mergers has been taken, (iii) a certificate of good standing of each Seller Subsidiary from the Delaware Secretary of State, each as of a date not more than 3 days prior to the Closing Date and (iv) the certificate described in Section 3.03 hereof.

 

(ii)           IDT Parent and IDT Subsidiary shall deliver to Liberty Parent (i) a certificate from IDT Parent or IDT Subsidiary, as the case may be, dated the Closing Date, executed by an

 

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executive officer of IDT Parent and the member or an officer of IDT Subsidiary, as applicable, stating that, to the best knowledge of such person, the representations and warranties of IDT Parent or IDT Subsidiary, as the case may be, set forth in Article 5 and Article 7 of this Agreement are, if specifically qualified by materiality, true and correct and, if not so qualified, true and correct in all material respects, in each case as of the Closing Date, except to the extent such representations and warranties are expressly made as of only an earlier date, (ii) a certificate of the secretary of each of IDT Parent and IDT Subsidiary, dated the Closing Date, certifying that all necessary corporate or limited liability company action required to be taken in connection with the execution, delivery and performance of this Agreement and the Registration Rights Agreement and the consummation of the Mergers has been taken, (iii) a certificate of good standing of IDT Parent and IDT Subsidiary from the Delaware Secretary of State, each as of a date not more than 3 days prior to the Closing Date and (iv) the certificates described in Section 3.02 hereof.

 

(iii)          IDT Parent shall deliver to Liberty Parent duly executed stock certificates representing the Consideration Shares, executed in proper form and registered in the following names and denominations (subject to Section 1.02(d)):

 

Name

 

Denomination

Liberty Media Corporation

 

46,117

Microwave Holdings, L.L.C.

 

2,030,669

Liberty TP Management, Inc.

 

676,890

 

(iv)          IDT Parent and Liberty Parent, Microwave Holdings, L.L.C., Liberty TP Management, Inc. and Liberty IDTel, Inc. shall execute and exchange a Registration Rights Agreement, in the form attached hereto as Annex A (the “Registration Rights Agreement”).

 

ARTICLE 3

 

CONDITIONS TO CLOSING

 

Section 3.01.  Conditions to Each Party’s Obligation to Effect the Mergers.  The respective obligations of each party to consummate the Mergers are subject to and conditioned on the satisfaction (or, to the extent permitted by applicable law, waiver) prior to or at the Closing, of each of the following conditions;

 

(a)           Receipt of IDT Parent Board Approval.  This Agreement and the Registration Rights Agreement and the transactions contemplated hereby and thereby shall have been approved by the board of directors of IDT Parent (“IDT Board Approval”) in compliance with the applicable requirements of the DGCL.

 

(b)           Receipt of LLC Approvals.  This Agreement and the transactions contemplated hereby (including without limitation the Mergers) shall have been approved by IDT Parent as the sole member of IDT Subsidiary in compliance with the applicable requirements of the DLLCA (“Required LLC Approvals”).

 

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(c)           No Material Adverse Effect.  Since the date of this Agreement, there shall have been no event, occurrence or circumstance which has had, or would reasonably be expected to have, a Material Adverse Effect.

 

(d)           No Restraints.  No provision of Applicable Law (as defined in Section 4.05), injunction, order or decree of any Governmental Entity (as defined in Section 4.05) shall be in effect which has the effect of making the Mergers or any of the other transactions contemplated hereby illegal or shall otherwise restrain or prohibit the consummation thereof.

 

Section 3.02.  Conditions of Liberty Parent and Seller Subsidiaries to Effect the Mergers.  The respective obligations of Liberty Parent and the Seller Subsidiaries, or any of them, to consummate the Mergers are subject to and conditioned upon the satisfaction (or, to the extent permitted by applicable law, waiver by Liberty Parent) prior to or at the Closing, of each of the following conditions:

 

(a)           Representations and Warranties; Covenants.  The representations and warranties of IDT Parent and IDT Subsidiary contained in Article 5 and Article 7 of this Agreement shall, if specifically qualified by materiality, be true and correct and, if not so qualified, be true and correct in all material respects, in each case as of the Closing Date, except to the extent such representations and warranties are expressly made as of only an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date), and all covenants and agreements of each of IDT Parent and IDT Subsidiary contained in this Agreement to be performed on or prior to the Closing Date shall have been performed or complied with, as applicable, in all material respects on or prior to the Closing Date.

 

(b)           Registration Rights Agreement.  IDT Parent and Liberty Parent, Microwave Holdings, L.L.C., Liberty TP Management, Inc. and Liberty IDTel, Inc. shall have executed and exchanged the Registration Rights Agreement.

 

(c)           NYSE Listing.  The Consideration Shares issuable in the Mergers shall have been authorized for listing on the NYSE, subject only to official notice of issuance.

 

(d)           Termination of Board Designee and Voting Arrangement.  IDT Parent, Howard S. Jonas and Liberty Parent shall have executed and exchanged a termination agreement, in such form as is reasonably acceptable to Liberty Parent, pursuant to which (i) the rights of Liberty Parent and its affiliates to designate one member of the board of directors of IDT Parent pursuant to Section 4.2 of that certain Subscription Agreement between IDT Parent and Liberty Parent, dated as of March 24, 2000 (the “Subscription Agreement”), shall be terminated and (ii) the voting agreement between Liberty Parent and Howard S. Jonas, entered into pursuant to Section 1.2(d) of the Subscription Agreement, shall be terminated.

 

(e)           Compliance Certificate.  Liberty Parent shall have received (i) a certificate from each of IDT Parent and IDT Subsidiary, dated as of the Closing Date, executed by an executive officer of IDT Parent and by the member or an officer of IDT Subsidiary, as applicable, stating that, to the best knowledge of each, the conditions set forth in Section 3.01 and this Section 3.02 have been satisfied.

 

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